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American Morning
Minding Your Business: Why Didn't Powell Power Market?
Aired February 06, 2003 - 07:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Colin Powell's speech at the U.N. yesterday did not boost the confidence of Wall Street, anyway yesterday for trading.
Andy Serwer is checking in, minding everybody's business right now.
We finished up how yesterday,. Andy?
ANDY SERWER, "FORTUNE" MAGAZINE: Twenty-eight points down, Bill. Not a lot of traction, as they say on Wall Street, from the speech.
Let's look at the numbers. Down 28, as I said, on the Dow, the Nasdaq and S&P both down 4.
Very interesting, though, we have a kind of a riveting chart, I think, here that shows how Wall Street responded. I know people across the country on trading floors were watching this. You can see the little spike there right under the 11:00. That's when the speech began at 10:30, and then we trailed up nicely. People were convinced.
What happened in the afternoon, though, as reaction came from across the country and across the world especially, the markets tailed off. We didn't get any change of mind from France, Russia. The Iraqi response is, this is poppycock, that kind of thing. In other words, if we'd had someone changing their mind or another country saying we're on board here, I think stocks would have continued to rise.
And so, we're seeing all kinds of implications, and one of them is the price of oil. The price of gasoline continuing to soar, up 8 percent so far this year alone. The price of unleaded gas now, 1.53 a gallon. And that is up sharply this year, as you can see there, the 11 cents. And also, very sharply from a year ago. No end in sight to that until we get some sort of resolution in Iraq. We have $34-a- barrel oil.
I talked to Mario Gobella (ph) yesterday, who is a noted Wall Street investor, and he was saying that $34-a-barrel oil is like picking the pocket of the American consumer... HEMMER: Wow!
SERWER: ... and American businesses.
You know, but do we have the right to expect, Bill, $25-a-barrel oil? That's what some people think. But that may be sort of a very...
(CROSSTALK)
HEMMER: Is it not true in 1991 on January the 1st, air war began, your oil barrel cost went from about $35 to 16?
SERWER: Plummeted.
HEMMER: As soon as it began?
SERWER: Right. And that's what people are anticipating. There are a lot of traders in the oil market who are suggesting the price will fall like that again, but so far, there is just a tremendous amount of fear in the market right now.
HEMMER: That's right. And you give us that warning time and time again.
SERWER: Yes.
HEMMER: Much appreciated, Drew.
SERWER: OK, see you.
HEMMER: See you next hour.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired February 6, 2003 - 07:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Colin Powell's speech at the U.N. yesterday did not boost the confidence of Wall Street, anyway yesterday for trading.
Andy Serwer is checking in, minding everybody's business right now.
We finished up how yesterday,. Andy?
ANDY SERWER, "FORTUNE" MAGAZINE: Twenty-eight points down, Bill. Not a lot of traction, as they say on Wall Street, from the speech.
Let's look at the numbers. Down 28, as I said, on the Dow, the Nasdaq and S&P both down 4.
Very interesting, though, we have a kind of a riveting chart, I think, here that shows how Wall Street responded. I know people across the country on trading floors were watching this. You can see the little spike there right under the 11:00. That's when the speech began at 10:30, and then we trailed up nicely. People were convinced.
What happened in the afternoon, though, as reaction came from across the country and across the world especially, the markets tailed off. We didn't get any change of mind from France, Russia. The Iraqi response is, this is poppycock, that kind of thing. In other words, if we'd had someone changing their mind or another country saying we're on board here, I think stocks would have continued to rise.
And so, we're seeing all kinds of implications, and one of them is the price of oil. The price of gasoline continuing to soar, up 8 percent so far this year alone. The price of unleaded gas now, 1.53 a gallon. And that is up sharply this year, as you can see there, the 11 cents. And also, very sharply from a year ago. No end in sight to that until we get some sort of resolution in Iraq. We have $34-a- barrel oil.
I talked to Mario Gobella (ph) yesterday, who is a noted Wall Street investor, and he was saying that $34-a-barrel oil is like picking the pocket of the American consumer... HEMMER: Wow!
SERWER: ... and American businesses.
You know, but do we have the right to expect, Bill, $25-a-barrel oil? That's what some people think. But that may be sort of a very...
(CROSSTALK)
HEMMER: Is it not true in 1991 on January the 1st, air war began, your oil barrel cost went from about $35 to 16?
SERWER: Plummeted.
HEMMER: As soon as it began?
SERWER: Right. And that's what people are anticipating. There are a lot of traders in the oil market who are suggesting the price will fall like that again, but so far, there is just a tremendous amount of fear in the market right now.
HEMMER: That's right. And you give us that warning time and time again.
SERWER: Yes.
HEMMER: Much appreciated, Drew.
SERWER: OK, see you.
HEMMER: See you next hour.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
